Regulation A: Extensions of Credit by Federal Reserve Banks, 68887-68888 [2022-25081]

Download as PDF 68887 Rules and Regulations Federal Register Vol. 87, No. 221 Thursday, November 17, 2022 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. FEDERAL RESERVE SYSTEM 12 CFR Part 201 [Docket No. R–1789; RIN 7100–AG 45] Regulation A: Extensions of Credit by Federal Reserve Banks Board of Governors of the Federal Reserve System. ACTION: Final rule. AGENCY: The Board of Governors of the Federal Reserve System (‘‘Board’’) has adopted final amendments to its Regulation A to reflect the Board’s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board’s primary credit rate action. DATES: Effective date: The amendments to part 201 (Regulation A) are effective November 17, 2022. Applicability date: The rate changes for primary and secondary credit were applicable on November 3, 2022. FOR FURTHER INFORMATION CONTACT: M. Benjamin Snodgrass, Senior Counsel (202–263–4877), Legal Division, or Francis Martinez, Lead Financial Institution & Policy Analyst (202–245– 4217), or Margaret DeBoer, Senior Associate Director (202–452–3139), Division of Monetary Affairs; for users of telephone systems via text telephone (TTY) or any TTY-based Telecommunications Relay Services (TRS), please call 711 from any telephone, anywhere in the United States; Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary and secondary credit available to depository institutions as a backup source of funding on a short-term basis, usually overnight. The primary and secondary credit rates are the interest lotter on DSK11XQN23PROD with RULES1 SUMMARY: VerDate Sep<11>2014 16:17 Nov 16, 2022 Jkt 259001 rates that the twelve Federal Reserve Banks charge for extensions of credit under these programs. In accordance with the Federal Reserve Act, the primary and secondary credit rates are established by the boards of directors of the Federal Reserve Banks, subject to review and determination of the Board. On November 2, 2022, the Board voted to approve a 0.75 percentage point increase in the primary credit rate, thereby increasing the primary credit rate from 3.25 percent to 4.00 percent. In addition, the Board had previously approved the renewal of the secondary credit rate formula, the primary credit rate plus 50 basis points. Under the formula, the secondary credit rate increased by 0.75 percentage points as a result of the Board’s primary credit rate action, thereby increasing the secondary credit rate from 3.75 percent to 4.50 percent. The amendments to Regulation A reflect these rate changes. The 0.75 percentage point increase in the primary credit rate was associated with a 0.75 percentage point increase in the target range for the federal funds rate (from a target range of 3 percent to 31⁄4 percent to a target range of 33⁄4 percent to 4 percent) announced by the Federal Open Market Committee on November 2, 2022, as described in the Board’s amendment of its Regulation D published elsewhere in today’s Federal Register. Administrative Procedure Act In general, the Administrative Procedure Act (‘‘APA’’) 1 imposes three principal requirements when an agency promulgates legislative rules (rules made pursuant to Congressionallydelegated authority): (1) publication with adequate notice of a proposed rule; (2) followed by a meaningful opportunity for the public to comment on the rule’s content; and (3) publication of the final rule not less than 30 days before its effective date. The APA provides that notice and comment procedures do not apply if the agency for good cause finds them to be ‘‘unnecessary, impracticable, or contrary to the public interest.’’ 2 Section 553(d) of the APA also provides that publication at least 30 days prior to a rule’s effective date is not required for (1) a substantive rule which grants or recognizes an exemption or relieves a 15 25 PO 00000 U.S.C. 551 et seq. U.S.C. 553(b)(3)(A). Frm 00001 Fmt 4700 Sfmt 4700 restriction; (2) interpretive rules and statements of policy; or (3) a rule for which the agency finds good cause for shortened notice and publishes its reasoning with the rule.3 The APA further provides that the notice, public comment, and delayed effective date requirements of 5 U.S.C. 553 do not apply ‘‘to the extent that there is involved . . . a matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.’’ 4 Regulation A establishes the interest rates that the twelve Reserve Banks charge for extensions of primary credit and secondary credit. The Board has determined that the notice, public comment, and delayed effective date requirements of the APA do not apply to these final amendments to Regulation A. The amendments involve a matter relating to loans and are therefore exempt under the terms of the APA. Furthermore, because delay would undermine the Board’s action in responding to economic data and conditions, the Board has determined that ‘‘good cause’’ exists within the meaning of the APA to dispense with the notice, public comment, and delayed effective date procedures of the APA with respect to the final amendments to Regulation A. Regulatory Flexibility Analysis The Regulatory Flexibility Act (‘‘RFA’’) does not apply to a rulemaking where a general notice of proposed rulemaking is not required.5 As noted previously, a general notice of proposed rulemaking is not required if the final rule involves a matter relating to loans. Furthermore, the Board has determined that it is unnecessary and contrary to the public interest to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA’s requirements relating to an initial and final regulatory flexibility analysis do not apply. Paperwork Reduction Act In accordance with the Paperwork Reduction Act (‘‘PRA’’) of 1995,6 the Board reviewed the final rule under the authority delegated to the Board by the 35 U.S.C. 553(d). U.S.C. 553(a)(2) (emphasis added). 5 5 U.S.C. 603, 604. 6 44 U.S.C. 3506; see 5 CFR part 1320 Appendix A.1. 45 E:\FR\FM\17NOR1.SGM 17NOR1 68888 Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / Rules and Regulations Office of Management and Budget. The final rule contains no requirements subject to the PRA. List of Subjects in 12 CFR Part 201 Banks, banking, Federal Reserve System, Reporting and recordkeeping. Authority and Issuance For the reasons set forth in the preamble, the Board is amending 12 CFR Chapter II to read as follows: PART 201—EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A) 1. The authority citation for part 201 continues to read as follows: ■ Authority: 12 U.S.C. 248(i)–(j), 343 et seq., 347a, 347b, 347c, 348 et seq., 357, 374, 374a, and 461. 2. In § 201.51, paragraphs (a) and (b) are revised to read as follows: ■ § 201.51 Interest rates applicable to credit extended by a Federal Reserve Bank.1 (a) Primary credit. The interest rate at each Federal Reserve Bank for primary credit provided to depository institutions under § 201.4(a) is 4.00 percent. (b) Secondary credit. The interest rate at each Federal Reserve Bank for secondary credit provided to depository institutions under § 201.4(b) is 4.50 percent. * * * * * By order of the Board of Governors of the Federal Reserve System. Ann E. Misback, Secretary of the Board. [FR Doc. 2022–25081 Filed 11–16–22; 8:45 am] BILLING CODE 6210–01–P FEDERAL RESERVE SYSTEM 12 CFR Part 204 [Docket No. R–1790; RIN 7100–AG 46] Regulation D: Reserve Requirements of Depository Institutions Board of Governors of the Federal Reserve System. ACTION: Final rule. AGENCY: The Board of Governors of the Federal Reserve System (‘‘Board’’) has adopted final amendments to its Regulation D to revise the rate of interest paid on balances (‘‘IORB’’) maintained at Federal Reserve Banks by lotter on DSK11XQN23PROD with RULES1 SUMMARY: 1 The primary, secondary, and seasonal credit rates described in this section apply to both advances and discounts made under the primary, secondary, and seasonal credit programs, respectively. VerDate Sep<11>2014 16:17 Nov 16, 2022 Jkt 259001 or on behalf of eligible institutions. The final amendments specify that IORB is 3.90 percent, a 0.75 percentage point increase from its prior level. The amendment is intended to enhance the role of IORB in maintaining the federal funds rate in the target range established by the Federal Open Market Committee (‘‘FOMC’’ or ‘‘Committee’’). DATES: Effective date: The amendments to part 204 (Regulation D) are effective November 17, 2022. Applicability date: The IORB rate change was applicable on November 3, 2022. FOR FURTHER INFORMATION CONTACT: M. Benjamin Snodgrass, Senior Counsel (202–263–4877), Legal Division, or Francis Martinez, Lead Financial Institution & Policy Analyst (202–245– 4217), or Margaret DeBoer, Senior Associate Director (202–452–3139), Division of Monetary Affairs; for users of telephone systems via text telephone (TTY) or any TTY-based Telecommunications Relay Services (TRS), please call 711 from any telephone, anywhere in the United States; Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. SUPPLEMENTARY INFORMATION: I. Statutory and Regulatory Background For monetary policy purposes, section 19 of the Federal Reserve Act (‘‘Act’’) imposes reserve requirements on certain types of deposits and other liabilities of depository institutions.1 Regulation D, which implements section 19 of the Act, requires that a depository institution meet reserve requirements by holding cash in its vault, or if vault cash is insufficient, by maintaining a balance in an account at a Federal Reserve Bank (‘‘Reserve Bank’’).2 Section 19 also provides that balances maintained by or on behalf of certain institutions in an account at a Reserve Bank may receive earnings to be paid by the Reserve Bank at least once each quarter, at a rate or rates not to exceed the general level of short-term interest rates.3 Institutions that are eligible to receive earnings on their balances held at Reserve Banks (‘‘eligible institutions’’) include depository institutions and certain other institutions.4 Section 19 also provides that the Board may prescribe regulations 1 12 U.S.C. 461(b). In March 2020, the Board set all reserve requirement ratios to zero percent. See Interim Final Rule, 85 FR 16525 (Mar. 24, 2020); Final Rule, 86 FR 8853 (Feb. 10, 2021). 2 12 CFR 204.5(a)(1). 3 12 U.S.C. 461(b)(1)(A) and (b)(12)(A). 4 See 12 U.S.C. 461(b)(1)(A) & (b)(12)(C); see also 12 CFR 204.2(y). PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 concerning the payment of earnings on balances at a Reserve Bank.5 Prior to these amendments, Regulation D established IORB at 3.15 percent.6 II. Amendment to IORB The Board is amending § 204.10(b)(1) of Regulation D to establish IORB at 3.90 percent. The amendment represents a 0.75 percentage point increase in IORB. This decision was announced on November 2, 2022, with an effective date of November 3, 2022, in the Federal Reserve Implementation Note that accompanied the FOMC’s statement on November 2, 2022. The FOMC statement stated that the Committee decided to raise the target range for the federal funds rate to 33⁄4 to 4 percent. The Federal Reserve Implementation Note stated: The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 3.9 percent, effective November 3, 2022. As a result, the Board is amending § 204.10(b)(1) of Regulation D to establish IORB at 3.90 percent. III. Administrative Procedure Act In general, the Administrative Procedure Act (‘‘APA’’) 7 imposes three principal requirements when an agency promulgates legislative rules (rules made pursuant to Congressionallydelegated authority): (1) publication with adequate notice of a proposed rule; (2) followed by a meaningful opportunity for the public to comment on the rule’s content; and (3) publication of the final rule not less than 30 days before its effective date. The APA provides that notice and comment procedures do not apply if the agency for good cause finds them to be ‘‘unnecessary, impracticable, or contrary to the public interest.’’ 8 Section 553(d) of the APA also provides that publication at least 30 days prior to a rule’s effective date is not required for (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) a rule for which the agency finds good cause for shortened notice and publishes its reasoning with the rule.9 The Board has determined that good cause exists for finding that the notice, public comment, and delayed effective date provisions of the APA are unnecessary, impracticable, or contrary to the public interest with respect to 5 See 12 U.S.C. 461(b)(12)(B). 12 CFR 204.10(b)(1). 7 5 U.S.C. 551 et seq. 8 5 U.S.C. 553(b)(3)(A). 9 5 U.S.C. 553(d). 6 See E:\FR\FM\17NOR1.SGM 17NOR1

Agencies

FEDERAL RESERVE SYSTEM

[Federal Register Volume 87, Number 221 (Thursday, November 17, 2022)]
[Rules and Regulations]
[Pages 68887-68888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25081]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 87, No. 221 / Thursday, November 17, 2022 / 
Rules and Regulations

[[Page 68887]]



FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Docket No. R-1789; RIN 7100-AG 45]


Regulation A: Extensions of Credit by Federal Reserve Banks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System 
(``Board'') has adopted final amendments to its Regulation A to reflect 
the Board's approval of an increase in the rate for primary credit at 
each Federal Reserve Bank. The secondary credit rate at each Reserve 
Bank automatically increased by formula as a result of the Board's 
primary credit rate action.

DATES: 
    Effective date: The amendments to part 201 (Regulation A) are 
effective November 17, 2022.
    Applicability date: The rate changes for primary and secondary 
credit were applicable on November 3, 2022.

FOR FURTHER INFORMATION CONTACT: M. Benjamin Snodgrass, Senior Counsel 
(202-263-4877), Legal Division, or Francis Martinez, Lead Financial 
Institution & Policy Analyst (202-245-4217), or Margaret DeBoer, Senior 
Associate Director (202-452-3139), Division of Monetary Affairs; for 
users of telephone systems via text telephone (TTY) or any TTY-based 
Telecommunications Relay Services (TRS), please call 711 from any 
telephone, anywhere in the United States; Board of Governors of the 
Federal Reserve System, 20th and C Streets NW, Washington, DC 20551.

SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary and 
secondary credit available to depository institutions as a backup 
source of funding on a short-term basis, usually overnight. The primary 
and secondary credit rates are the interest rates that the twelve 
Federal Reserve Banks charge for extensions of credit under these 
programs. In accordance with the Federal Reserve Act, the primary and 
secondary credit rates are established by the boards of directors of 
the Federal Reserve Banks, subject to review and determination of the 
Board.
    On November 2, 2022, the Board voted to approve a 0.75 percentage 
point increase in the primary credit rate, thereby increasing the 
primary credit rate from 3.25 percent to 4.00 percent. In addition, the 
Board had previously approved the renewal of the secondary credit rate 
formula, the primary credit rate plus 50 basis points. Under the 
formula, the secondary credit rate increased by 0.75 percentage points 
as a result of the Board's primary credit rate action, thereby 
increasing the secondary credit rate from 3.75 percent to 4.50 percent. 
The amendments to Regulation A reflect these rate changes.
    The 0.75 percentage point increase in the primary credit rate was 
associated with a 0.75 percentage point increase in the target range 
for the federal funds rate (from a target range of 3 percent to 3\1/4\ 
percent to a target range of 3\3/4\ percent to 4 percent) announced by 
the Federal Open Market Committee on November 2, 2022, as described in 
the Board's amendment of its Regulation D published elsewhere in 
today's Federal Register.

Administrative Procedure Act

    In general, the Administrative Procedure Act (``APA'') \1\ imposes 
three principal requirements when an agency promulgates legislative 
rules (rules made pursuant to Congressionally-delegated authority): (1) 
publication with adequate notice of a proposed rule; (2) followed by a 
meaningful opportunity for the public to comment on the rule's content; 
and (3) publication of the final rule not less than 30 days before its 
effective date. The APA provides that notice and comment procedures do 
not apply if the agency for good cause finds them to be ``unnecessary, 
impracticable, or contrary to the public interest.'' \2\ Section 553(d) 
of the APA also provides that publication at least 30 days prior to a 
rule's effective date is not required for (1) a substantive rule which 
grants or recognizes an exemption or relieves a restriction; (2) 
interpretive rules and statements of policy; or (3) a rule for which 
the agency finds good cause for shortened notice and publishes its 
reasoning with the rule.\3\ The APA further provides that the notice, 
public comment, and delayed effective date requirements of 5 U.S.C. 553 
do not apply ``to the extent that there is involved . . . a matter 
relating to agency management or personnel or to public property, 
loans, grants, benefits, or contracts.'' \4\
---------------------------------------------------------------------------

    \1\ 5 U.S.C. 551 et seq.
    \2\ 5 U.S.C. 553(b)(3)(A).
    \3\ 5 U.S.C. 553(d).
    \4\ 5 U.S.C. 553(a)(2) (emphasis added).
---------------------------------------------------------------------------

    Regulation A establishes the interest rates that the twelve Reserve 
Banks charge for extensions of primary credit and secondary credit. The 
Board has determined that the notice, public comment, and delayed 
effective date requirements of the APA do not apply to these final 
amendments to Regulation A. The amendments involve a matter relating to 
loans and are therefore exempt under the terms of the APA. Furthermore, 
because delay would undermine the Board's action in responding to 
economic data and conditions, the Board has determined that ``good 
cause'' exists within the meaning of the APA to dispense with the 
notice, public comment, and delayed effective date procedures of the 
APA with respect to the final amendments to Regulation A.

Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (``RFA'') does not apply to a 
rulemaking where a general notice of proposed rulemaking is not 
required.\5\ As noted previously, a general notice of proposed 
rulemaking is not required if the final rule involves a matter relating 
to loans. Furthermore, the Board has determined that it is unnecessary 
and contrary to the public interest to publish a general notice of 
proposed rulemaking for this final rule. Accordingly, the RFA's 
requirements relating to an initial and final regulatory flexibility 
analysis do not apply.
---------------------------------------------------------------------------

    \5\ 5 U.S.C. 603, 604.
---------------------------------------------------------------------------

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (``PRA'') of 
1995,\6\ the Board reviewed the final rule under the authority 
delegated to the Board by the

[[Page 68888]]

Office of Management and Budget. The final rule contains no 
requirements subject to the PRA.
---------------------------------------------------------------------------

    \6\ 44 U.S.C. 3506; see 5 CFR part 1320 Appendix A.1.
---------------------------------------------------------------------------

List of Subjects in 12 CFR Part 201

    Banks, banking, Federal Reserve System, Reporting and 
recordkeeping.

Authority and Issuance

    For the reasons set forth in the preamble, the Board is amending 12 
CFR Chapter II to read as follows:

PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION 
A)

0
1. The authority citation for part 201 continues to read as follows:

    Authority:  12 U.S.C. 248(i)-(j), 343 et seq., 347a, 347b, 347c, 
348 et seq., 357, 374, 374a, and 461.


0
2. In Sec.  201.51, paragraphs (a) and (b) are revised to read as 
follows:


Sec.  201.51   Interest rates applicable to credit extended by a 
Federal Reserve Bank.\1\
---------------------------------------------------------------------------

    \1\ The primary, secondary, and seasonal credit rates described 
in this section apply to both advances and discounts made under the 
primary, secondary, and seasonal credit programs, respectively.
---------------------------------------------------------------------------

    (a) Primary credit. The interest rate at each Federal Reserve Bank 
for primary credit provided to depository institutions under Sec.  
201.4(a) is 4.00 percent.
    (b) Secondary credit. The interest rate at each Federal Reserve 
Bank for secondary credit provided to depository institutions under 
Sec.  201.4(b) is 4.50 percent.
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2022-25081 Filed 11-16-22; 8:45 am]
BILLING CODE 6210-01-P

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